NetOne corruption unearthed in inflated payments to Powertel

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SCANDAL-RIDDEN mobile phone operator NetOne inflated payments to state-owned internet provider Powertel by over US$1 million for leased circuits and bandwidth, it has been established.

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The irregular payments affected NetOne’s cash flow position, contributing to the company’s financial turmoil.

This is revealed in an audit report on NetOne titled Provision of Comprehensive Forensic Investigation Services to NetOne Cellular Services compiled by PriceWaterhouse CoopersZimbabwe (PwC) on behalf of the Auditor-General.

NetOne CE Reward Kangai (pictured) was sent on forced leave in March after the company’s board sanctioned a forensic audit into the affairs of the country’s second-largest mobile phone operator.

Suspended NetOne chief executive Reward Kangai

Suspended NetOne chief executive Reward Kangai

According to the forensic report, NetOne had invalid supporting documentation for leased circuits for the US$1 650 000 paid to Powertel.

“Upon assessing the supporting documents, we noted various payments amounting to US$1 650 000. Attached to each payment instruction was a copy of the same payment requisition with a value of US$687 660,11. The payment requisition was prepared by Mr. Mabambe on 21 August 2014 and was approved by Mr. Mashiri on the same date,” the report reads.

“We enquired with Mr. Munakiri on the reason why payments made exceeded the value of payment requisition. He stated that he was not aware of the anomaly and his assumption was that it could have been done in error. There is risk that the supplier could have been overpaid on specific invoices during the period under review.

“Based on the findings noted above, staff negligently attached incorrect supporting documents to payment documents.

Management seems to have missed the fact that the supporting documents were relevant/inappropriate.”

The audit revealed that there was no evidence that regular supplier reconciliations were being performed in the period under review for both the leased circuits and electricity accounts.

“Mr. Machaiwana informed us that NetOne started the process of reconciling the Powertel electricity account in November 2015 on a monthly basis. Payment amounting to US$6 222 824 were made to Powertel for the leased account and US$9 288 229,06 for the electricity account in the period under review. Failure to reconcile supplier accounts exposed NetOne to the possibility of overpaying Powertel,” the report reads.

The audit has unearthed new evidence of mismanagement and corruption with details showing that the company made shady payments totalling US$32 million to several firms without documentation.

The companies, the report showed, include Essar Tubes and Towers which received US$6 168 854,59; Gemalto (US$3 064 374,11); Huawei (US$1 586 248,79); Masimba Holdings (US$3 528 714,03); Bopela Group (US$913 174,24); Sectional Poles (US$987 822); Techno tree (US$50 000); Intervoice Convergys (US$7 122 029,99); Redan (US$1 693 086,13) and Nokia Siemens (US$7 010 684,77), bringing the total to US$32 million.-ZimInd

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